We like to refer to scholarships and grants as "free money." This type of aid directly reduces your cost of attendance. These types of financial aid are in contrast to financial aid that is awarded in the form of student loans, parent loans, work-study, and other programs that require future payment or employment.

Obviously, scholarships and grants are the best kind of financial awards. Within the attending college or university itself, the student may find and apply for scholarships specific to that university. For instance, most Honors programs offer scholarships. Also, there may be scholarships offered to students in a particular field of study. Universities with active alumni groups usually offer scholarships. Thee types of scholarships should be listed on the school's website but also look for alumni groups' websites.

Many organizations will specify their scholarships as either need-based or merit-based. It's important to know which kind you're more likely to receive before taking the time to apply. Normally the organizations require an application and essay.

Your high school's guidance counselor is a good source for local organizations offering scholarships. Another great source for researching scholarships is www.fastweb.com.

Also check with your state for any grants they may offer. Many states have reciprocal agreements with other states. That is, if you live in one state but go to a state school in another state, you may be eligible for a grant from your home state.